Brazil: All or nothing, now or never

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Four years have passed since senate of Brazil approved Federal Law No. 13,756/18, seemingly paving the way for the creation of a regulated online and retail fixed-odds sports betting market/. 

After an extension, the government was given a final deadline of 12 December to sign-off on the new regulations. That deadline has now passed, with the country’s outgoing president Jair Bolsonaro opting to leave the bill unsigned. 

Years of work – including the development of the entire regulatory regime by the country’s Secretariat of Evaluation, Planning, Energy and Lottery (SECAP) – now lie in tatters.

What happens next with sports betting in Brazil is yet to be seen. 

Status quo in Brazil

The news is unlikely to change things substantially for international operators licensed in jurisidictions such as Curaçao, and will instead only really affect local business’ abilities to set up operations – and the government’s ability to receive tax revenue from Brazilians’ betting acitivities. 

However, there remains a narrow window of opportunity to get the far more expansive gaming billBill 442/91 – over the line this year. The bill would legalise a wide range of gambling products, from casinos to popular local lottery variant jogo de bicho to online gaming – as well as in general establish a regulatory framework for the sector.  

If the bill can get through the senate before the year’s legislative session ends, then the legislation has a very good chance of being signed by the incoming president Luiz Inácio Lula da Silva.    

Olê, olá, Lula!

The electoral contest between Lula and Bolsonaro was a nailbiter that grabbed the world’s attention – and may well have a long-lasting effect on the country’s gambling regulations. 

Lula’s electoral coalition lacks the militantly anti-gambling evangelical element which had complicated Bolsonaro’s relationship with the gambling lobby. As such, he’s likely to be more sympathetic to expansion efforts.

While in Brazil nothing is certain, this gives hope that the legalisation of Bill 442/91 would not be vetoed by the president. Lula was once a firm proponent of legalisation, including adding the reopening of the sector to his 2002 Workers Party manifesto.

However, a scandal during his first term as president has complicated his relationship with the sector.

The scandal led to Lula passing a provisional measure that outlawed bingo halls across Brazil. Since then, the new president has shied away from the issue.

Despite this, according to Brazilian news agency BNLData, Lula stated that he would respect the National Congress’s decision in legalising gambling.  

Now or never 

Amid the reportedly bitter transition process from one administration to the next, just six days remain of the legislative session to pass bill 442/91 in the senate.

 President Bolsonaro has withdrawn to the Alvorada Palace, and is rarely seen attending public engagements. However, this executive inaction may be a positive sign in favour of passage.  

Although the bill has seen little movement for most of 2022, the ongoing transition process has changed the landscape in a way that could be good bill’s prospects. According to media reports, Edinho Silva, Lula’s communication coordinator has announced his support of the bill, which may mean that the president-elect himself supports it too.   

The cited reason for supporting the bill was that the revenue raised by legal gambling revenue could go toward social or health projects. Right now, most governments are in desperate need of revenue sources – especially if the government wishes to fund new public programmes.  

Bolsonaro’s opposition to the bill was one of the main reasons that the legislation stalledafter passing in the Chamber of Deputies. With the president unengaged and due to leave in the not-too-distant future, it may be that he does not have the influence he once had within the senate. 

That’s no guarantee – but there is a small hope that the deadlock is close to being lifted. 

If a vote does not come to pass in the senate on the bill, or indeed it fails, then the legislature will break up and not reconvene until 2 February. With February of course being the month of Carnival, it may not be until towards the end of the month that any progress is made. 

By then a new senate makeup, more closely allied to the outgoing president and therefore the evangelical lobby, will take over the upper house, further complicating the passage of the bill. 

In practice, this could mean months or years more of malaise and paralysis as the republic continues to fail to collect tax revenues being swallowed up by untaxed, foreign operators. 

There’s a path to remedy this – but the senate has less than a week to see it through. 

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